Required Reading

Market Segmentation

[1]Marketers cannot appeal to all buyers in all markets OR appeal in the same way (diverse needs). Often firms identify the segments it can serve best to build the right relationships with the right customers. To create value for targeted customers, the firm must segment, target, position (perception – think of the product in a particular way) & differentiate its product.

Market Segmentation is the process of dividing a market up into distinct groups of buyers who have different needs, characteristics or behaviours, and who might require separate products or marketing programs. A Segment is a group of consumers who respond in similar way to a given set of marketing efforts (demand is influenced by the same factors).

International Markets are segmented by Geographic’s, Economics (Developed), Political/Legal, Cultural (language). Inter-Market Segmentation is segments of consumers with similar needs/buying behaviours located in different countries.

Requirements For Effective Segmentation

Measurable – size, purchasing power & profile of the segment must be measurable

Differentiation And Positioning

Positioning

A products position is the way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products - based on perceptions, impressions & feelings. E.g. Porsche positioned as a performance car.

Step 1 – Identify A Set Of Differentiating Competitive Advantages Upon Which To Build A Position (General To The Industry)

Perceptual Positioning Maps shows consumer perceptions of their brand against competing brands on important buying dimensions

Step 3 – Selecting An Overall Positioning Strategy

The full positioning of a brand is known as the value proposition – the full mix of benefits upon which a brand is differentiated & positioned. It is the answer to why should I buy your brand?.

More For More – most upscale G/S, higher price, vulnerable to more for the same. E.g. IPhone

More For The Same – Lexus Vs BMW

Same For Less – Discount stores, Bunning’s

Less For Much Less – 2$ Store

More For Less – hard to sustain long term

Developing A Positioning Statement

This position must be communicated & delivered & monitored & adapted over time to meet consumer needs. E.g. more for more – high quality products, high price, distribute through high quality dealers & advertise in high quality media.